One difficulty in using voluntary transactions to internalize externalities is that
A) people are motivated by self-interest and are often unwilling to engage in a transaction that might make another person better off.
B) the government usually will not enforce contracts of this type.
C) transaction costs of coming to an agreement can be very large when numerous people are involved.
D) people usually don't understand what the real opportunity costs are that they face.
C
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Productivity is defined as:
a. output per unit of capital. b. output per labor hour. c. output divided by the price level. d. the percentage change in total annual output.
In the national savings and investment identity framework, an inflow of savings from abroad is, by definition, equal to _______.
a. private sector investment b. the trade surplus c. the trade deficit d. domestic household savings
On which of the following types of unemployment do macroeconomic tools have the greatest effect?
a. Cyclical unemployment. b. All the above. c. Structural unemployment. d. None of the above e. Seasonal unemployment.
Another way to describe the growth rate of spending is:
A. the growth rate of real GDP. B. the growth rate of nominal GDP. C. the growth rate of the velocity of money. D. the growth rate of the money supply.